Importance of Onboarding and Qualification of Vendors and Contractors

There is change on the horizon. With the landscape for capital-intensive industries evolving, a heavy reliance on contractors and vendors is becoming the new normal. It is more critical than ever to ensure the health, safety, environmental, and quality compliance of your vendors, suppliers, and contractors with an effective system.

The Bureau of Labor Statistics (BLS) data shows that in the United States there were 5,333 worker fatalities and 2.8 million nonfatal workplace injuries and illnesses reported by private industry employers in 2019. The fatal work injury rate was 3.5 fatalities per 100,000 full-time equivalent (FTE) workers, which was the rate reported in 2018. 

Over the past 20 years, the U.S has seen a steady decline in recordable incident rates. However, according to reports from industry groups such as DEKRA and the Campbell Institute, Serious Injuries and Fatalities (SIFs) have declined at a significantly slower rate. By leveraging technology and implementing a contractor prequal management system, Hiring organizations can bolster their contractor qualification efforts and effectively communicate their health and safety requirements.  

Well-developed onboarding and qualification programs that are properly implemented are necessary to minimize risk exposures connected to injuries, illnesses and fatalities across myriad job tasks and environments. Such programs ensure that both employees and contractors are aware of the hazards associated with the work they are performing as well as understand how to perform their job safely. 

A contractor onboarding and qualification system helps centralize critical information. What should you track, and how much time is required to bring this information together? Organizations should evaluate their current processes and ask themselves the following questions: 

• Do we have a process for checking company’s financial health
• Are we digitally mature and attempting towards green onboarding? Are we still collecting PDF PreQual form via email? 
• Do we have a process for checking company’s insurance coverage capabilities? Are they insured?  
• How much time are we spending upon manual qualification activities? Can we save time and thus cost by establishing an automated rules-based engine? 
• Do we have a background check on file? 
• Do we have a process for checking company’s cyber policies? Is our data secure with the subcontractor/vendor? 
• Do we have a process for checking company’s safety, TRIR, EMR and training records? 
• Are we splitting up frequency and risk categories to focus on the most safety critical contractor groups? 
• Do we have a process for educating contractors our company’s code of conduct, Ethics, and other policies? 
• Are we ensuring appropriate training is in place for our contractor base? 
• Do we know if our contractors are further subcontracting, exposing our company to additional risk? 
• Are we asking for all the critical information every year to ensure safety? 
• Is our qualification data fully up to date? 

These considerations allow an organization to identify and highlight what aligns to its safety culture and what may need to be addressed. The challenge here is resources. Who and how much time is needed to centralize and verify this information to identify vital trends and gaps about identifying and addressing risk? 

The Value of a Contractor Onboarding and Qualification System 

A simple Contractor Onboarding and Qualification System can allow contractors and subcontractors to import required data into one source. This can dramatically reduce time and resources from a Hiring organization point and hold contractor organizations accountable for their safety performance, training, insurance, and other critical requirements to work. There are several benefits from implementing such systems like: 

1. Better Decisions 
2. Safer Work Environment 
3. Reduced Claims 
4. Reduces Administrative Burden 
5. Automated Processes 
6. Online Access 
7. Save Costs 

Track Total Recordable Incident Rate –TRIR & Experience Modification Rate -EMR 

The use of an effective Contractor Onboarding and Qualification System has great potential to drive incident rates down over time. Organizations can reap the benefits of this trend. The increased focus on leading indicators, such as pre-job risk assessments, near-miss reporting and sharing lessons learned from incidents, has also contributed to lowering incident rates. These assessments also help Organizations to choose the safer contractors/vendors for their projects. 

Using Technology to Mitigate Risk, Reduce Cost & Save Time 

In the past few years there has been a rise in new reporting technologies to aid in obtaining a greater picture of onboarding and qualifying 3rd party partners. What are these tools and how effective are they? 

Placard/Barcode Check-In 

To manage security, accountability and competency risks, industries have increased the use of card scanning systems when coming on job sites. This serves many purposes, such as controlling exactly who can come on site by linking card scanning technology to employee-level requirements and using mobile scanning devices at key points-of-entry. Admission can be made dependent upon the completion of required training and satisfactory qualifications. Absent digital technology, this would require multiple security and reception personnel. In the case of an emergency, the technology can easily pull a list of all and contractors/vendors being issued the check in barcode. 

Virtual Learning 

Training is a critical key in supporting contractor safety and compliance to ensure familiarity with projects, processes, and procedures. The COVID-19 pandemic this year has created an even greater need for virtual learning opportunities to ensure compliance with regulations. Simple online onboarding training sessions for example, provides complimentary, high-quality, computer-based training materials from third-party providers for contractor customers to satisfy Client requirements. 

Audit Systems 

Technology will never fully remove the need for manual intervention; however, it can significantly reduce the paperwork. As audits can vary from company to company, Organizations are seeing the need to ensure that these well-written programs are reaching their intended audience, the field worker. Online surveys and assessments as well as interviews with a contracting company’s management team can give a clearer picture as to the level of implementation and employee understanding of a company’s HSE program.  

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